Lack of policy, a hurdle in Tamil Nadu's growth: Retailers Association

According to estimates, the retail sector contributes as much as 15 to 17 per cent to the country’s GDP. But the $680 bn segment needs a policy that honours the ease of doing business, in letter and spirit, noted Kumar Rajagopalan, CEO, Retailers Association of India (RAI).

While Maharashtra, Karnataka and Andhra Pradesh have a retail policy in place, TN is found wanting in this space. “The RAI is engaged in discussion with eight states including Rajasthan, Haryana, Telangana, Gujarat and Punjab in this regard. They are on the verge of rolling out a retail policy that will ease up the process of doing business. Within a year or so, these states will have a policy,” said Rajagopalan, at a recently concluded retail summit here.

“The Andhra Pradesh government under Chandrababu Naidu, entered into an agreement with RAI, two months ago, asking us to help develop retail in that state,” he said, highlighting the positive impact of having such a policy on retail. For instance, the ease of retailing has been enhanced in Maharashtra, with an option to keep stores open 365 days a year and 24/7. In Karnataka, the policy has not yet been implemented. Kerala has started talking about a policy for retail. And in Gujarat, the government has asked RAI to help create a retail fest to coincide with ‘Vibrant Gujarat’ Summit in January 2019, he said. The rationale behind governments doing this is their belief that in GST era, the state of consumption is the one which makes money. So, the place of manufacturing is not as important as the final point of sale as that is what drives the tax collection for every state. “For example, you may manufacture in TN but if the sale happens in Karnataka, it is advantageous to the latter. Many state governments have not fully acknowledged this,” Rajagopalan sought to point out.

According to him, a comprehensive retail policy will empower women too. For every 10 male employees in retail, there are only 2 female employees. In modern retail, women comprise 25 per cent of the workforce while their numbers go up to 30 per cent in malls. “Retail should have a 50-50 gender balance. Students in many countries fund their education by taking up part-time employment. But there is no such provision within our labour policy framework,” he said.

As many as 100 new malls are expected to sprout in the next three years across India, as mall development has not taken place as envisaged.

“Typically, Rs 500 to Rs 1,000 crore is the investment required to set up a mall, that employs 6,000 to 10,000 people directly and indirectly. The government must enable the process of getting a mall up and running faster by cutting down red tape. The average time taken to establish a mall is four years in our country. Of that, the build and develop period is only 18 months.”

The TN government reached out to RAI for pointers to implement the plastic cover ban. “This request has come from the Environment Ministry, two months ago, following the successful execution of the ban in Maharashtra, two years ago. RAI is engaged in a constant dialogue. The plastic carry bag ban in Maharashtra came with a rule that individuals found carrying such bags will be fined. Maharashtra did not even offer time before affecting the ban, leaving retailers stranded with a huge stock. That is why RAI would like to work with the local govt to avoid such issues.”